EFFECTS OF ELECTRONIC ACCOUNTING ON THE CORPORATE PERFORMANCE OF ORGANIZATIONS A STUDY OF ABBOT RESOURCES, ENUGU

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Accounting according to Adebiyi, (2010:12) is the measurement, processing and communication of financial information about economic entities. Accounting, which has been called the “language of business”, measures the results of an organization’s economic activities and conveys this information to a variety of users including investors, creditors, management, and regulators (Agbasi, 2008:43). Anunolam (2006:88) defined accounting as the systematic and comprehensive recording of financial transactions pertaining to a business. Accounting also refers to the process of summarizing, analyzing and reporting these transactions. The financial statements that summarize a large company’s operations, financial position and cash flows over a particular period are a concise summary of hundreds of thousands of financial transactions it may have entered into over this period. Accounting is one of the key functions for almost any business; it may be handled by a bookkeeper and accountant at small firms or by sizeable finance departments with dozens of employees at larger companies.

Dreytus, (2009: 12) is of the view that the reports generated by various streams of accounting, such as cost accounting and management accounting, are invaluable in helping management make informed decisions. While basic accounting functions can be handled by a bookkeeper, advanced accounting is handled by qualified accountants who possess designations such as lCAN (Institute of Chartered Accountants). All accounting designations are the culmination of years of study and rigorous examinations, combined with a minimum number of years-of practical accounting experience. Electronic accounting according to Eze, (2010:21) is the application of’ online and internet technologies to the business accounting function. Similar to e-mail being an electronic versi on of traditional mail, electronic accounting is electronic enablement of lawful accounting and traceable accounting processes which were traditionally manual and paper-based. Nweze (2008:56) opined that electronic accounting involves performing regular accounting functions, accounting research and the accounting training and education through various computer based /internet based accounting tools such-as digital tool kits, various internet resources, international web-based materials institute and company databases which are internet based, web links, internet based accounting software and electronic financial spreadsheet tools to provide efficient decision making. Electronic accounting improve the corporate performance of organizations by enhancing its diverse accounting activities such as associated with accounts payable, accounts receivable, financial reporting and bank and account reconciliations. The above variables are the dependent variables which this study is meant to establish a relationship with the independent variable (electronic accounting).